FINRA RN 11-38 August 8, 2011 FINRA published a notice providing guidance to firms on the effect of the downgrade of the United States long-term credit rating under the SEC Net Capital and Customer Protection rules. Generally, there is no change in firms' responsibilities under the rules after the ratings change. Under the Net Capital Rule, FINRA and the SEC affirmed that there is no change in the capital treatment of government securities under Rule 15c3-1(c)(2)(vi)(A). In addition, the notice confirms that the ratings downgrade has no effect on the definition of "qualified security" under

Open Meeting on Three Final Rule Proposals under the Dodd-Frank Act Agricultural Swaps This is the pre-Federal Register Release version. It repeals existing Part 35 in its entirety, replacing it with a new heading: Swaps in an Agricultural Commodity (Agricultural Swaps) and creates a new Rule 35.1 Agricultural Swaps, generally. Cross References Dodd-Frank Act, Title VII, Secs. 723(c)(3) and 733; new CEA Sec. 5h(b)(2); 17 CFR Part 35.

Brief of SEC, Amicus Curiae in Salameh v. Tarsadia Hotel (9th Cir No. 11-55479) August 5, 2011 The SEC submitted an amicus brief in Salameh v. Tarsadia Hotel, a case in the Ninth Circuit Court of Appeals regarding whether certain real estate interests are "securities" for the purposes of the federal securities laws. The case deals with the sale of hotel rooms and related rental-management agreements in a luxury hotel that the defendants developed. During development, the defendants "sold" the rooms to plaintiffs and then entered into rental-management agreements with the plaintiffs that

FINRA RN 11-36 August 3, 2011 FINRA filed an amendment to Section 4 of Schedule A of the FINRA By-Laws to establish a fee for persons who cancel or reschedule a qualification exam or Regulatory Element Continuing Education session three to ten business days prior to the appointment date. The new fee is effective September 1, 2011. Cross References SEC Release No. 34-64691 (Rule change) FINRA Rule 1250

FINRA RN 11-35 July 29, 2011 FINRA published a regulatory notice regarding modified procedures by which firms designate their method of allocating options exercise notices. The notice provides a new application for firms beginning an options business or changing their allocation method. In addition, FINRA updated the "random selection allocation procedures," included in the notice. FINRA also reminds firms that they must inform customers in writing of the method used to allocate option exercise assignment notices - including an explanation of the systems and the consequences of the system. The